Marginal Value

Two of the best ideas I heard this week were curated or catalyzed by Clay Shirky.

One is the mathematical concept of the Lévy flight, which I already wrote about in my last post.

The other is in a link e-Patient Dave sent me. I ran across it again in a discussion of models for connectivity (“freedom to connect”). In a post called “The Collapse of Complex Business Models,” Clay discusses Joseph Tainter’s Collapse of Complex Societies, applying Tainter’s thinking to the web and digital media. Tainter says that societies that become increasingly sophisticated will tend to collapse, not despite their sophistication, but because of it.

Early on, the marginal value of this complexity is positive—each additional bit of complexity more than pays for itself in improved output—but over time, the law of diminishing returns reduces the marginal value, until it disappears completely. At this point, any additional complexity is pure cost.

Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.

The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

He then goes on to explain the evolution of complex and entrenched procedures within sophisticated, high quality media production, and how these are now trumped by the popularity of (commitment of mindshare to) simple, “good enough” media. Clay’s closing paragraph:

When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

Interesting to note that there are no comments on this post, only pingbacks (links to it by others). It’s an important, already influential piece.

The first point, about foraging, is that people don’t necessarily sustain adoption of something, even if they really really like it. In the early days of blogging, I made this point in talking about links and hits from blogrolls and RSS feeds. Someone finds your blog, they really like it, so they add the link to their news aggregator. Everytime the news aggregator updates, the link to your blog produces hits, but those hits are questionable, because a common behavior is to add an RSS feed, read it for a while if at all, then move on to something else. People don’t get the web delivered every morning as a newspaper, or monthly as a magazine. It’s not push, it’s pull, and they’re surfing based on criteria other than loyalty. We have to adjust our thinking accordingly.

The second point is that complexity reaches a point of diminishing return, costs escalate beyond what we’re willing to pay, and whole systems break as a result. With media, it’s not just that it’s simpler to make something that is compelling and gets mindshare. It’s that simpler access to “good enough” media (via the web) trumps more complex (or costly) access via movies or television. Consider the traffic in torrents of lower def but “good enough” copies of movies, television shows, record albums, etc. Or think of simpler paid access to slightly more lossy music/video via iTunes, or Hulu.

There’s more to talk about, like the social thing – we’re committing mindshare to online conversations that, before, we might have commmitted to passive consumption of television programming. But you get the drift – behaviors are changing online. And low-cost/free/good-enough is as entrenched in online culture as expensive/complex/high quality is entrenched in old media culture.